The Late Delivery of the Festival Stage
A festival organiser contracted a staging company to build a main stage for a three-day event starting 1 August, with a clause stating: 'Time is of the essence. Completion by 25 July is a condition of this contract.' The staging company was delayed because its usual steel supplier failed to deliver; it sourced steel elsewhere at an extra £30,000 but finished on 30 July. The organiser had to cancel the first day, losing £150,000 in ticket revenue, and spent £20,000 on temporary staging. The contract contained a clause: 'The staging company shall not be liable for any delay caused by suppliers.' The organiser had also paid a £50,000 deposit.
1. Is the staging company in breach, and does the supplier clause protect it?
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The completion date is expressly made a condition and time is of the essence, so failure to complete by 25 July is a breach of a condition. The organiser may terminate and claim damages. The supplier clause is an exclusion or force majeure provision; it must be construed narrowly against the party relying on it. The delay was caused by the supplier's failure to deliver, which on its face falls within the words 'caused by suppliers'. But the staging company chose to source steel elsewhere and could have done so earlier; the clause may only protect delays genuinely outside its control, not a failure to mitigate or to arrange alternatives. A court may also ask whether the clause covers a delay that the company could reasonably have avoided. The stronger view is that the clause does not excuse the company, because it had an alternative source and the clause should not be read to cover its own inadequate contingency planning.
2. What can the organiser recover, and how does the £50,000 deposit and the £30,000 extra cost feature?
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The organiser can claim damages for the cancelled first day (£150,000 lost ticket revenue) and the £20,000 temporary staging, subject to remoteness and mitigation. Lost ticket revenue is the natural consequence of a missed festival opening and is recoverable. The £50,000 deposit is not damages; it is an advance payment, and the organiser can recover it as money paid for a failed consideration or set it off against sums owed, but cannot recover it twice. The staging company's £30,000 extra cost is its own cost of performance and is not recoverable from the organiser; it may be relevant only if the company counterclaims for a variation, which it did not agree. The staging company may argue the organiser failed to mitigate, but cancelling one day was reasonable. The organiser should also consider whether the supplier clause, if effective, caps or excludes the £150,000 claim.